RFMD busts sales record on Polaris success
Leading cell-phone power amplifier (PA) supplier RF Micro Devices (RFMD) enjoyed a record quarter over the recent holidays, posting its best-ever revenue figure of $208 million.
That represented a 23% increase on the same period in the previous year, thanks largely to the success of its Polaris transceivers and front-end transmit modules, which have increased its overall market share.
CEO Bob Bruggeworth said that the improved picture was set to continue throughout 2006, with increased demand from Motorola for GSM products, where RFMD's chips will feature in some of the handset maker's top-of-the-range phones.
"Polaris chipset revenue more than tripled year-over-year," said a buoyant Bruggeworth.
Overall, sales in the December quarter resulted in a $14.7 million net profit, whereas RFMD barely broke even over the holiday period one year ago.
The Greensboro, NC, company will now set about further improving its profit margin using two key strategies. First of all, having increased its wafer fab capacity by around 25%, RFMD will steadily ramp production of GaAs PHEMTs throughout the year.
At the moment, RFMD sources these components from UK-based Filtronic, but views this production switch as the single most effective way to improve its profit margin on goods sold.
While Filtronic will receive smaller orders for GaAs PHEMT switches from RFMD this year, Bruggeworth says that it plans to retain a second-source supplier of the components to ensure that it can meet customer demand.
The switches are an essential component of RFMD's front-end transmit modules, described by Bruggeworth as the company's fastest-ever product ramp.
The second margin-improvement strategy is to double capacity in its Beijing, China, module assembly plant.
As well as the increase in GaAs device production, RFMD revealed some details about a longer-term strategy to produce single-chip CMOS transceivers for the EDGE market.
Products based on the CMOS architecture are expected to ramp in around a year, with chip production at Jazz Semiconductor, RFMD's silicon foundry partner.
RFMD has a stated aim of becoming a billion-dollar company in terms of annual revenue, and with revenue of over $200 million expected for the seasonally-weak March quarter, the firm appears to be making steady progress towards that goal.
